TaxTMI 
TaxTMI 
2019 (7) TMI 12
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....gn vendors and were clearing the same under the heading CTSH 7604 (subjected to duty @ 5%). Department sought to classify the said goods under CTSH 7610 (liable to duty @ 10%). Appeal No. C/1810/2012: A show cause notice, dated 02.03.2010, covering the period, 02.09.2009 to 02.03.2010, was issued seeking to re-classify the Aluminium profiles imported from CTH 7604 CTH 7610; to demand differential duty, of Rs. 2, 25,797 for the period along with interest and to impose penalty. Additional Commissioner, vide OIO Dt. 351/2010 (ADC) ACC dated 05.10.2010 re-classified the goods under CTH 7610, confirmed the differential duty. However, he dropped the proposal to impose penalties. Appeal filed by the appellants, was rejected by Commissioner Appeals, vide OIA No. 88/2012 dated 13.04.2012. Appeal No. C/20006/2015: Meanwhile, Based on the investigations by the Directorate of Revenue Intelligence, show cause notice F. No. VIII/26/14/2010-DRI VIC dated 10.10.2013 was issued proposing to re-classify the aluminium profiles imported by the appellant, during the period October 2008 to July 2013, through various ports and airports in India, under the heading 7610 of CTH; to demand differential....
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....e upheld. He relies upon (i) CCE Vs. Dewas Techno Products (P) Ltd.) 2001 (131) E.L.T. 182 (Tri. - Del) (ii) Denso Kirloskar India Pvt. Ltd. vs. CC 2003 (158) ELT 187 2.3. Learned Counsel further submits that Board, vide Circular No.11/88 dated 15.4.1988, has clarified that only after undertaking of operations like drilling holes or trimming on rolled articles of aluminium will get classified under 7610 and therefore cannot be termed as 'shapes and sections of aluminium'. The departmental clarification has been rejected merely on the ground that it only refers to 'rolled article of aluminium' without considering the main issue relating to aluminium shapes and sections being subjected to certain process which will make them 'prepared for use in structure'. Therefore, the claim for classification by the appellant under 76.04 should be upheld. 2.4. Learned Counsel submits that Heading 76.10 will cover usage in structures relates mainly to buildings or other large immovable property. In the present case, neither the imported profiles are prepared for use in structures nor the partitions which are installed can be termed as structures and hence the said heading would not app....
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....tegories of goods which fall outside the ambit of specified entries. He relies upon. (i) Hindustan Poles Corporation v. CCE, 2006 (196) ELT 400(SC) (ii) CCE v. Pioneer Scientific Glass Works, 2006 (197) ELT 308 (SC) (iii) CCE Vs Wockhardt Life Sciences Ltd 2012 (277) ELT 299 (SC) 2.9. Learned Counsel submits that Burden to prove the classification of goods is on the department. He relies upon. (i) Tribunal's order No. 21129/2018 dated 08.08.2018 in the case MVR Chemicals in appeal No. E/631/2009 (ii) Puma Ayurvedic Herbal (P) Ltd vs. CCE, Nagpur, 2006(196) ELT 3 (SC) (iii) Union of India Vs. Garware Nylons Limited, 1996 (87) ELT 12 (S.C.) 3. Learned Counsel also submits that Commissioner (appeals), Chennai vide OIA No. 849/2011 dt. 17.10.2011 dropped the demands and accepted the classification under the heading 7604. This order has not been challenged. Therefore, the issue covered under the said order attains finality. He relied upon. (i) Boving Fouress Ltd Vs. CCE, 2006(202) ELT 389(SC) (ii) CCE Vs. Surcoat Paints (P) Ltd, 2008 (232) ELT 4 (SC) (iii) CCE Vs. Gujarat State Fertilizers & Chem. Ltd. 2008 (229) ELT 9 (SC) 3.1. Learned Counsel ....
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.... ELT 177(S.C) (iv) CCE Vs Ishan Research lab P Ltd. 2008 (230) ELT 7 (S.C) 4. Learned Counsel further submits that Interest & Penalty [appeal C/20006/2015] cannot be imposed. The facts of the case, narrated above, clearly establish that the appellant has been importing the goods and also under bona fide belief, adopting the classification under CTH 7604. Based on the fact that the Commissioner (Appeals), Chennai accepted the classification under 7604 and the said order not being challenged, the appellant was under impression that the classification has been accepted. Therefore, as there is no intention to evade, no penalty could be imposed. He relies upon. (i) Gabbar Engineering Co vs. CCE 2009 (244) ELT 552 (Tri. - Ahmd.) (ii) Alembic Ltd vs. CCE 2009 (241) ELT 439 (Tri-Ahmd.) 5. In respect of appeal No C/20001/2015, Learned Counsel further submits that penalty cannot be imposed as the goods in question have been assessed and appropriate duty was also paid. Therefore the question of confiscation would not arise and hence provisions of Section 112(a) would not be applicable. Entire issue relates to change in the classification of the imported goods. The department at....
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....G. Sugar & Industries Ltd. Vs Commissioner Of C. Ex., Meerut-Ii 2011 (266) E.L.T. 339 (Tri. - Del.), that it was essentially for the appellants to lead necessary evidence in that regard. Mere rising of plea in answer to the show cause notice does not by itself mean the proof of correctness of such plea; Mere production of photographs does not amount to proof in support of such plea. This case was upheld by Allahabad High Court 2012 (276) E.L.T. A61 (All.). It was held by Bombay High Court in D.R. Enterprises Limited Vs Assistant Collector Of Customs, SIIB 2002 (147) E.L.T. 3 (Bom) and affirmed by Supreme Court in 2015 (322) ELT 795 that the general Rule is that the burden of proof lies on the party asserting a particular fact to be true. 6.2. Learned AR submitted that the following is the evidence for Classification of impugned products under CTH 7610. • Product catalogues, technical write up submitted by the importers describe the goods as parts of structures only; each part is made specifically for certain purpose and designed to fit in specific sizes of glasses or making specific sizes of door frames; each profile is designed to fit certain specific category/size....
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....ues for classification. (i) Rana Enterprises Vs CC Mumbai 2011 (267) E.L.T. 546 (Tri. - Mumbai) (ii) Chaya graphics (India) Pvt. Ltd. Vs CC, Bangalore 2018 (362) ELT 911 (Tri. - Bang.) 6.3. Learned AR further submits that the appellants argument that the impugned goods are cut to size to erect/ install the said structures is not acceptable as drilling is a minor process carried out at site; profiles are usually cut on site, making it possible to incorporate last minute changes in layout or to adjust site conditions; impugned goods have all essential characteristics of profiles 'prepared for use in structures' before import; Documentary evidences clearly suggest that the impugned goods are specifically designed for use in glass partition and door frames; Appellants, vide letter dated 22.01.2010, themselves admitted that the impugned goods basically used for glass non-load bearing partitions and skirting, which is nothing but used as parts of structures. 6.4. Learned AR also submits that the appellant claims imported goods to be hollow profiles (falling under 7604) but they did not produce any evidence of carrying out processes on impugned goods resulting in prepare....
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....terpreted the Rule 3(a); Classification needs to be done based on the relevant explanatory notes and chapter notes, the technical write up, the purchase order placed by the appellants on their overseas suppliers and the purchase orders placed on the appellants by the customers, the letter dated 22.01.2010 of the appellants; specific description of the goods is under CTH 76109030. Learned AR further submits that OIA, 849/2011 dated 17.10.2011, passed by CC(Appeals), Chennai was not accepted on merits; no appeal was filed on the grounds of monetary limits, the decision of Commissioner (Appeals) does not have any value of precedence as facts of both the cases are different. Learned AR further submits that appellants claim on Affidavit, registration certificates and payment of service tax are of no use; appellants by themselves submitted that they are dealing in various types of products and materials; engaged in imports and erection, commissioning and installation services; just because importer is paying service tax, exemption cannot be granted from payment of custom duties; impugned goods, at the time of import, are of the nature/ state which fit them into the classification under 7....
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....g it possible to incorporate last minute changes in layout or to adjust site conditions; the profiles imported has all the essential characters of profiles prepared for use in structures. 7.1. For a proper understanding of the issue, it is required to have a look at the relevant Section/Chapter notes and explanatory notes to HSN. Chapter Note to Chapter 76 defines profiles as follows: (b) Profiles- Rolled, extruded, drawn, forged or formed products, coiled or not, of a uniform cross-section along their whole length, which do not conform to any of the definitions of bars, rods, wire, plates, sheets, strip, foil, tubes or pipes. The expression also covers cast or sintered products, of the same forms, which have been subsequently worked after production (otherwise than by simple trimming or de-scaling), provided that they have not thereby assumed the character of articles or products of other headings. 7.2. Description of items under CTH 7604 is as follows. 7604 Aluminum bars, rods and profiles 7604 10 - aluminum, not alloyed 7604 10 10 --- Wire rods 7604 10 20 ---Bars and rods, other than wire rods ---Profiles 7604 10 31 ----Hollow ....
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....caling. If, however, they have been worked beyond this stage, they are classified in this heading, provided that they have not thereby assumed the character of articles or of products of other headings. Wire bars and billets with their ends tapered or otherwise worked simply to facilitate their entry into machines for converting them into, e.g., wire drawing stock (wire-rod) or tubes, are, however, classified in heading 74.03. 7.5. Explanatory Notes CTH 76.10 are as follows: Aluminium structures (excluding prefabricated buildings of heading 94.06) and parts of structures (for example, bridges and bridge-sections, towers, lattice masts, roofs, roofing frameworks, doors and windows and their frames and thresholds for doors, balustrades, pillars and columns); aluminum plates, rods, profiles, tubes and the like, prepared for use in structures. 7610.10 - Doors, windows and their frames and thresholds for doors 7610.90 - Other The provisions of the Explanatory Note to heading 73.08 apply, mutatis mutandis, to this heading. In the case of aluminum, structural parts are sometimes bonded together with synthetic resins or rubber compounds instead of being fixed by ....
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....repared (e.g., drilled, bent or notched) for use in structures. The heading further covers products consisting of separate rolled bars twisted together, which are also used for reinforced or pre-stressed concrete work. The heading does not cover: a) Assembled sheet piling (heading 73.01). b) Coffering panels intended for pouring concrete, having the character of moulds (heading84.80). c) Constructions clearly identifiable as machinery parts (Section XVI). d) Constructions of Section XVII such as railway and tramway track fixtures and fittings, and mechanical signaling equipment, of heading 86.08; chassis frames for railway rolling-stock, etc; or motor vehicles (Chapter 86 or 87), and the floating structures of Chapter 89. e) Movable shelved furniture (Heading 94.03) 8. On -going through the Section/Chapter/HSN Explanatory Notes, as above, it is seen that while CTH 7604 1031 covers Aluminium profiles as claimed by the appellants Heading No.7610 9030 covers Aluminium plates, rods, profiles, tubes and the like prepared for use in structures. Explanatory Notes to Heading 7610 under HSN referred to Note to Heading 73.08, as per which the Heading also covers parts....
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....eme Court in the case of Dunlop India Ltd. and Madras Rubber Factory Ltd.(supra) and submits that when there is no reference to the use or adaptation of the article, the basis of end-use for a classification is absolutely irrelevant. However, in the instant case, we find that the Tariff Entry for 7610 combined with the HSN Explanatory Notes give an understanding that the profiles "prepared for use" in structures are classifiable under this heading only. We find that Hon'ble Supreme Court in the same case i.e. Dunlop India Ltd. has also held that, (Para 31) it is well established that in interpreting the meaning of words in the taxing statute, the acceptation of a particular word by the Trade and its popular meaning should command itself to its authority. (Para 36) ....................... It is clear that the meanings given to articles in a physical statute must be as people in trade and commerce, conversant with the subject, generally treat and understand them in the usual course. But once an article is classified and put under a distinct entry, the basis of classification is not open to question. Technical and scientific tests offer guidance only within limits. O....
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....er has made a distinction that the CBEC Circular clarifies about the classification of rolled particles of Aluminium and not about Aluminium profiles prepared for use. We find that classification of a product depends on the Section / Chapter Notes and references to the Heading. One need not depend on the clarification issued by the Board, which could at best be clarificatory in nature. We find that the learned Commissioner, going by the literature of the impugned goods; their nomenclature as used by the appellants, their suppliers and their customers; identification of specific parts by code numbers; the photographs of the impugned goods and Section / Chapter / HSN Notes, has correctly concluded that the impugned goods are classifiable under CTH 7610 3090. Further, we find that in terms of sub-rule (c) of Rule 3 of General Rules for the Interpretation of this Schedule. Rule 3(c): When goods cannot be classified by reference to (a) or (b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration. For this reason also, we hold that the impugned goods are classifiable under CTH 7610 3090. 9. The appell....
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....013 invoking an extended period. By the very fact that a show-cause notice has been already issued to the appellants as early as 2.3.2010, show-cause notice invoking extended period cannot be issued on 10.10.2013 i.e., after 31/2 years. Moreover, the issue relates to interpretation of the headings of the Customs Tariff Act. The importer has been importing for a very long time. Even though it is alleged that most of the bills have been assessed under RMS scheme, a few of Bills of Entry could have been intercepted for assessment and examination. Having issued a show-cause notice in 2010 on the same proposition, department cannot plead that there is suppression of fact, etc., necessitating invocation of extended period. Moreover, the issue is already in the domain of department's knowledge in view of the learned Commissioner (A) Chennai's order. We find that the importer's reliance on the cases cited by them is well placed. We find that extended period cannot be invoked and consequentially, equal penalty under Section 114A cannot be imposed on M/s. D & M Building Product Pvt Ltd. (in respect of appeal No. C/2006/2015). Regarding the penalty imposed on Shri Prabprit Singh Kochar (in re....